China Net Finance, April 29 Recently, Xingye Technology (002674.SZ) released its 2023 annual report, the company achieved operating income of 2.700 billion yuan, a year-on-year increase of 35.81%, net profit attributable to the parent company of 186 million yuan, a year-on-year increase of 23.74%, and net cash flow from operating activities of 25.216 million yuan, a year-on-year increase of 122.69%.
2023 is still a difficult year for entities like Xingye Technology, although the consumer market continues to recover and rebound, the foundation for recovering and expanding consumption is still not solid, and the cost pressure of some physical business operators still needs to be alleviated.
In this context, Xingye Technology, as a veteran leather entity, has not only achieved stable growth in the main leather business for shoes, bags and straps, but also achieved a brilliant growth of more than 90% in the leather for automotive interiors of the company's second curve, and has established cooperative relations with many domestic automobile brands such as Ideal, Weilai, Wenjie and Geely. Recently, Hongxing Automobile Leather, a holding subsidiary, has obtained the "Fixed-point Notice" for leather interiors of a model project, and the total amount of the project life cycle is expected to be 1 billion yuan in 5 years.
An automotive industry analyst told a financial reporter from China.com: "The performance of leather for shoes, bags and belts is stable, and the leather for automotive interiors of the second curve is in the blue ocean. ”
The revenue of leather for automotive interiors increased by more than 90% and was qualified to supply brands such as Li and NIO
In April 2022, Xingye Technology announced that in order to horizontally expand product categories, enter the natural automotive interior leather market, and enhance the company's profitability, the company acquired 45% of the equity of Hongxing Automobile Leather with its own funds of 54 million yuan, and increased its capital to Hongxing Automobile Leather with its own funds of 30 million yuan. It is reported that Hongxing Automotive Leather is mainly engaged in the research and development, production and sales of leather for automotive interiors.
At that time, the news of Xingye Technology's acquisition of Hongxing Automobile Leather caused waves in the capital market. As we all know, new energy vehicles have continued to maintain a high growth momentum in recent years, as well as the development trend of high-end cockpits and refined interiors of new energy vehicles, which is bound to drive the growth of demand for leather for automotive interiors.
According to the data of the Passenger Association, the retail sales of new energy passenger vehicles in China will be 7.736 million in 2023, a year-on-year increase of 36.2%, of which the increase in the sales of high-end new energy models of independent brands such as Li and Huawei Wenjie will drive the growth of demand for leather for automotive interiors.
Living up to expectations, Xingye Technology proved to the market with its brilliant performance that the company had the foresight to acquire Hongxing Automobile Leather. In 2023, Hongxing Auto Leather will achieve an operating income of 606 million yuan, a net profit of 98.7858 million yuan, and a gross profit margin of 29.85%. In terms of products, Xingye Technology's automotive interior leather achieved an operating income of 599 million yuan, a significant increase of 94.21% year-on-year.
According to the annual report, Hongxing Automobile Leather will give full play to the company's raw material resource integration advantages and financial advantages in 2023, actively cooperate with the order needs of major customers, expand production capacity in an orderly manner, and ensure the stable quality and delivery of delivered products during the rapid increase in orders from downstream customers, and achieve a significant increase in sales. At the same time, through the introduction of the management system, the traceability of the whole production process is realized, the lean production is further optimized and improved, and the results of cost reduction and efficiency increase are obvious, which helps the profitability of Hongxing automobile leather to be further improved.
At present, Hongxing Automobile Leather has obtained the supplier qualification and batch supply of new energy automobile brands such as Li Auto, Huawei Wenjie Automobile, Weilai Automobile and other new energy automobile brands by virtue of its advantages in product research and development, quality control, stable supply and rapid response, etc., and Hongxing Automobile Leather is also a supplier of automotive interior leather for traditional automobile brands such as Mazda, Geely and Chery Automobile.
Recently, Hongxing Automobile Leather has made a new step in customer development. Hongxing Automobile Leather has obtained the "Fixed-point Notice" of leather interior of a model project of an automobile OEM, and will supply leather interior for the latter. According to the plan, the project is expected to start in March 2025, with a project life cycle of 5 years, and an estimated total life cycle amount of RMB 1 billion.
The above-mentioned automotive industry analyst told the financial reporter of China.com: "With the help of its own resources and experience in the leather industry for more than 30 years, Xingye Technology aims at the opportunity to quickly cut into the field of leather for new energy vehicle interiors, and achieves exponential performance growth in two years, and has been highly recognized by customers." In the future, with the development trend of high-end automobile cockpit and refined interior, Hongxing automotive leather will also achieve rapid growth in production and sales. ”
The main cattle leather business is steadily and steadily developing, and efforts are made to explore overseas markets
Not only is the second growth curve bright, Xingye Technology, as a veteran leather enterprise, the company's main cattle leather business has been steady and steady, and its performance has maintained stable growth for many years, providing strong support for the development of overseas markets.
From the perspective of the overall financial situation, from 2020 to 2023, Xingye Technology's operating income has grown steadily for four consecutive years, with operating income of 1.460 billion yuan, 1.726 billion yuan, 1.988 billion yuan and 2.700 billion yuan respectively in each period.
In terms of product classification, in 2023, Xingye Technology will achieve operating income of 1.866 billion yuan for leather for shoes, bags and belts, a year-on-year increase of 19.59% from 1.561 billion yuan in the same period last year, accounting for 69.59% of operating income.
In fact, Xingye Technology is achieving the growth of its main business in the midst of the contrarian trend. Although the consumer market will continue to recover and rebound in 2023, the foundation for recovering and expanding consumption is still not solid, residents' consumer confidence needs to be further improved, the recovery of some goods sales and service consumption is slow, and the cost pressure of physical business operators still needs to be eased. However, with its more than 30 years of experience in the leather field, Xingye Technology has taken the initiative to adjust the layout of the domestic market, develop customized products according to customer needs, and improve products and services, so as to ensure sales growth.
At the same time, Xingye Technology actively explores overseas markets, sets up a professional overseas brand development team, and formulates overseas market development plans. By expanding the overseas production capacity of the Indonesian factory, we will carry out a global layout and better serve overseas brand customers. In 2023, the company successfully entered the supply chain of VF Group, COLEHAAN and other brands, taking a solid step in the expansion of overseas markets.
According to the annual report, Xingye Technology's products in the field of leather for shoes, bags and belts are positioned in the middle and high-end, mainly to meet the needs of well-known brands at home and abroad, such as Lirong, Senda, TIMBERLAND, COLEHAAN, POLO, ALDO, ROCKY, CLARKS, Red Dragonfly, Desanna, Fianne, Lilang, Wanlima, Jihua Group, Kangnai, Aokang, Qianbaidu, Yashi, etc.
In addition, according to the institutional survey on April 26, Xingye Technology said in its reply to "the development prospects of the leather business for shoes, bags and belts in the future": "As a leading enterprise in the tanning industry, the company has many advantages in product research and development, procurement scale, and capacity supply. In the domestic market, we have built a stable customer network through direct sales and distribution channels to ensure stable sales. At the same time, the company is also actively deploying in overseas markets, and has entered the supply chain of many overseas brands, and the follow-up company will increase the expansion of overseas brands and increase the proportion of overseas sales. ”
(Editor in charge: Wang Qingyu)
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